TL;DR
- Spam Transactions: A study by Dan Smith highlights a significant spam issue on the Solana blockchain, with bots accounting for 95% of failed transactions, despite real users making up 97% of addresses.
- Meme Coin Impact: Arthur Hayes points out that the proliferation of meme coins has led to a surge in transaction failures on Solana, with a claimed 75% failure rate, casting doubt on the blockchain’s TPS claims.
- Technical Implications: Despite the high failure rate, validators must still process these transactions, which offers a deeper insight into Solana’s TPS and underscores the need to address spam for the network’s sustainability.
Solana (SOL) has been making headlines for its unique transaction landscape. However, a recent analysis by trader and digital asset investor, Dan Smith, has revealed a significant issue with the Solana blockchain – an abundance of spam transactions.
Smith recently conducted a study, which he shared in a series of articles. The study revealed that spammers are manipulating the number of unsuccessful transactions on the Solana network. According to Smith, the typical user of the Solana blockchain sends less than 50 transactions daily, with an 8% failure rate. This means that 1 out of every 10 transactions fails.
It’s fascinating that Smith discovered that 97% of addresses are from real users and only contribute to 0.6% of failed transactions. In comparison, any address sending over 5,000 transactions daily is identified as a bot. In one day, 879 addresses met this criteria and were responsible for 95% of failed transactions, with an alarming failure rate of 79%.
Arthur Hayes Weighs In Meme Coins and Solana’s TPS Debacle
Smith found that just 0.1% of addresses were behind 95% of failed transactions on Solana, indicating a significant issue with spam on the platform. The discussion about Solana’s transaction ecosystem was initiated by Arthur Hayes, who is a co-founder of the BitMEX exchange.
Hayes claimed that the abundance of meme coins has had a detrimental impact on Solana, leading to a significant increase in transaction failures on the blockchain. He noted that 75% of transactions are now failing due to investors heavily trading these meme coins, referring to Solana’s TPS as “bullshit“.
Smith acknowledged that when considering the perspective of a typical user, the transaction per second (TPS) metric of Solana may appear exaggerated. However, it is important to recognize that even with a high number of failed transactions, validators are still required to allocate resources to process them. This provides a more comprehensive understanding of Solana’s TPS from a technical standpoint.
In conclusion, while Solana’s transaction landscape is marred by spam and bot activity, it’s important to consider the technical implications of these transactions. At the time of writing, Solana’s native token, SOL is trading at around $144, increasing nearly 9% in the last 24 hours, despite having a downward trend in the past week with a 15% drop.
